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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2012
Stock-Based Compensation | 16. Stock-Based Compensation The Company has an Omnibus Incentive and Equity Plan (the “Plan”) under which officers, employees, directors and consultants may be granted equity-based awards, including RSUs, stock options and unrestricted shares of common stock. At December 31, 2012, 1,800,000 shares of common stock were authorized for issuance under the Plan, of which 530,857 remain available for grant. Each RSU entitles the holder to one share of Virtus common stock when the restriction expires. RSUs generally have a term of one to three years and may be either time-vested or performance-contingent. Stock options generally vest over three years and have a contractual life of ten years. Stock options are granted with an exercise price equal to the fair market value of the shares at the date of grant. The fair value of each RSU is estimated using the intrinsic value method which is based on the fair market value price on the date of grant. Shares that are issued upon exercise of employee stock options and vesting of RSUs are newly issued shares and not issued from treasury stock. The Company estimated the grant-date fair value of stock options granted using the Black-Scholes option valuation model with the following assumptions:
|  | 2011 |
Expected dividend yield |  |  | 0.0% |
Expected volatility |  |  | 47.2% |
Risk-free interest rate |  |  | 2.4%-2.9% |
Expected life |  |  | 6.5 years |
Expected dividend yield—The Company has never declared or paid dividends on its common stock. Expected volatility—Volatility is a measure of the amount by which a financial variable such as a share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company based its estimated volatility on the historical volatility of a peer group of publically traded companies, which includes companies that are in the same industry or are competitors, because of the Company’s limited history as an independent public company. Risk-free interest rate—This is the average U.S. Treasury rate at the time of grant having a term that most closely approximates the expected term of the option. Expected life—This is the period of time that the option grants are expected to remain outstanding. The Company calculates the expected life of the options using the “simplified method” as prescribed under the provisions of ASC 718. The simplified method was used because sufficient historical exercise data necessary for the Company to provide a reasonable basis to estimate the expected life does not exist. The Company generally uses the midpoint between the end of the vesting period and the contractual life of the grant to estimate option exercise timing. The simplified method was applied for all options granted during 2011 and 2012. Stock-based compensation expense is summarized as follows:
|  | Years Ended December 31, |
|  | 2012 |  |  | 2011 |  |  | 2010 |
($ in thousands) |  |  |  |  |  |  |  |  |
Stock-based compensation expense |  | $ | 6,927 |  |  | $ | 5,625 |  |  | $ | 3,894 |
During the years ended December 31, 2012 and December 31, 2011, the Company granted 47,996 and 88,030 performance contingent RSUs, respectively. During the year ended December 31, 2012 and December 31 2011, total stock-based compensation expense included $1.7 million and $1.3 million, respectively, for these performance contingent RSUs. As of December 31, 2012 and 2011, unamortized stock-based compensation expense for performance contingent RSUs was $3.2 million and $3.0 million, respectively. No performance contingent awards were granted for the year ended December 31, 2010. As of December 31, 2012, unamortized stock-based compensation expense for outstanding RSUs and stock options was $7.1 million and $0.2 million, respectively, with weighted average remaining amortization periods of 1.4 years and 0.7 years, respectively. As of December 31, 2011, unamortized stock-based compensation expense for outstanding RSUs and stock options was $7.1 million and $0.5 million, respectively, with weighted average remaining amortization periods of 0.9 years and 0.5 years, respectively. The Company did not capitalize any stock-based compensation expenses during the years ended December 31, 2012, 2011 and 2010. Stock option activity for the year ended December 31, 2012 is summarized as follows:
|  | Number of shares |  |  | Weighted Average Exercise Price |
Outstanding at December 31, 2011 |  |  | 352,942 |  |  | $ | 20.21 |
Granted |  |  | — |  |  | $ | — |
Exercised |  |  | (130,304 | ) |  | $ | 20.23 |
Forfeited |  |  | (2,289 | ) |  | $ | 37.01 |
Outstanding at December 31, 2012 |  |  | 220,349 |  |  | $ | 20.03 |
Vested and exercisable at December 31, 2012 |  |  | 195,380 |  |  | $ | 18.31 |
Options expected to vest at December 31, 2012 |  |  | 21,985 |  |  | $ | 33.49 |
The weighted-average grant-date fair value of options granted during the years ended December 31, 2011 and 2010 was $27.56 and $12.14, respectively. The weighted-average remaining contractual term for options outstanding at December 31, 2012 and December 31, 2011 was 5.8 and 6.4 years, respectively. The weighted-average remaining contractual term for options vested and exercisable at December 31, 2012 was 5.5 years. The weighted-average remaining contractual term for options expected to vest at December 31, 2012 was 7.7 years. At December 31, 2012, the aggregate intrinsic value of options outstanding, options vested and exercisable, and options expected to vest was $22.2 million, $20.1 million, and $1.9 million, respectively. The total grant-date fair value of options vested during the years ended December 31, 2012, 2011 and 2010 was $1.2 million, less than $0.1 million and $0.5 million, respectively. The total intrinsic value of options exercised for the years ended December 31, 2012, 2011 and 2010 was $9.2, $0.9 million and $0.1 million, respectively. Cash received from stock option exercises was $2.6 million $1.3 million and $0.1 million for 2012, 2011 and 2010, respectively. RSU activity for the year ended December 31, 2012 is summarized as follows:
|  | Number of shares |  |  | Weighted Average Grant Date Fair Value |
Outstanding at December 31, 2011 |  |  | 576,704 |  |  | $ | 24.16 |
Granted |  |  | 102,531 |  |  | $ | 81.47 |
Forfeited |  |  | (4,907 | ) |  | $ | 50.12 |
Settled |  |  | (382,271 | ) |  | $ | 13.52 |
Outstanding at December 31, 2012 |  |  | 292,057 |  |  | $ | 57.89 |
The grant-date intrinsic value of RSUs granted during the year ended December 31, 2012 was $8.4 million. At December 31, 2012, outstanding RSUs have a weighted average remaining contractual life of 1.4 years. The weighted-average grant-date fair value of RSUs granted during the years ended December 31, 2012, 2011 and 2010 was $81.47, $52.28 and $20.21 per share, respectively. The total fair value of RSUs vested during the years ended December 31, 2012, 2011 and 2010 was $30.7 million, $2.9 million and $1.5 million, respectively. For the years ended December 31, 2012, 2011 and 2010, a total of 143,102, 12,484 and 18,122 RSUs, respectively, were withheld through net share settlement by the Company to settle employee tax withholding obligations. The Company paid $11.5 million, $0.7 million and $0.4 million for the years ended December 31, 2012, 2011 and 2010, respectively, in employee tax withholding obligations related to RSUs withheld. These net share settlements had the effect of share repurchases by the Company as they reduced the number of shares that would have been otherwise issued as a result of the vesting. Employee Stock Purchase Plan The Company offers an employee stock purchase plan that allows employees to purchase shares of common stock on the open market at market price through after-tax payroll deductions. The initial transaction fees are paid for by the Company and shares of common stock are purchased on a quarterly basis. The Company does not reserve shares for this plan or discount the purchase price of the shares.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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